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A NEW CONCEPT IN SELLING LUXURY: THE $25,000 SHOPPING CLUB | June 27, 2012 (0 comments)
Richmond, B.C., Canada—Imagine Costco with a $25,000 annual membership fee.
Well, not exactly. Colton’s Personal Couture, a new members-only shopping club in Vancouver that’s geared to the ultra-rich, couldn’t be a farther cry from Costco’s cavernous warehouses and crowded parking lots. Members are provided with door-to-door limousine service for their shopping excursions, and when they arrive, they find the exclusive, by-appointment-only salon has been personalized for their visit. The lavish, chandelier-bedecked showrooms in a converted townhouse are stocked with clothing and accessories carefully curated by an individual “fashion confidante” for each client’s own particular taste and style.
But Colton’s is taking at least two cues from Costco’s strategy. It’s planning for most of its profits to come through sales of memberships, not products; and as such, it can take a slim margin even on super-luxe goods—including jewelry and watches—and pass those savings along to members.
Memberships to Colton’s Personal Couture, owned by entrepreneur Howard Colton, are $25,000 a year. According to this article in the Vancouver Sun, $7,500 of the upfront fee goes toward membership, with the remaining $17,500 left as a credit toward purchases. Colton’s goal is one-on-one shopping, not heavy foot traffic, and memberships will be limited. Initially he is seeking only 200 members, with the goal of doubling that number once any kinks in the business are worked out.
Shopping at Colton’s is a fully bespoke experience, says Adam Edge, director of marketing, who spoke to The Centurion about Colton’s philosophy.
“We get to know clients very well, and dress the showroom accordingly for their visit. Our fashion confidantes can suggest, ‘You like this [designer], have you tried this?’ We can suggest a particular style, then acquire the pieces for you.” Many clients need guidance to get past the known brands and try out lesser known but top quality designers, says Edge. He joked that many of Colton’s clients speak two languages: Chanel and Hermes. So it’s up to the fashion consultants to introduce them to other luxury brands and help them develop an individual style: perhaps the Dior crocodile handbag instead of the popular Hermes Birkin croc bag, or a pair of Cesare Paciotti shoes instead of the exact same Chanel flats all her friends are wearing.
Howard Colton in the men's department of his private shopping salon.
It all sounds like personal shopping on steroids—but Edge insists it isn’t. Personal shoppers, he says, expect a client to spend a certain amount of money, and they’re often paid on commission. At Colton’s, there’s no pressure to buy, because the profits are coming from memberships.
“If you want to just come in for a coffee or a glass of wine we know you like, that’s ok too. It’s very laid back,” Edge says.
It’s the network. Business matchmaking is key to Colton’s business. Colton’s throws events frequently and fills the room with a mix of people who cater to the rich, and/or who expect to be catered to.
This host of partnerships allows Colton’s consultants to be able to advise clients on any aspect of their lives—from where to live to what to drink and which schools are the best. But it also serves another critical purpose: getting the goods. Colton’s has enough global contacts to access luxury brands from around the world but it doesn’t carry everything in inventory (especially jewelry) and thus needs to be able to procure an item specifically for a client.
Britton Diamonds in Vancouver, a bespoke jewelry showroom, is one example Colton’s has reached out to for jewelry, says Edge. Other partners include luxury wine merchants, private banking executives from six of eight top Canadian banks, luxury auto dealers, real estate agents who specialize in luxury properties, and even Canada’s only two caviar suppliers.
Interior room in Colton's salon, here and top of page.
“It’s not about making money. The whole point of Colton’s is to get people to network and be among like people. We want them to grow their businesses too,” says Edge. For example, at one event, the caviar suppliers got to meet Vancouver’s finest chefs, as well as directors of first-class airline lounges who need to buy food and wine for passengers.
“You can’t put a price on that,” says Edge.
Owner Howard Colton is a partner and principal supplier to online luxury discounter Bluefly.com, which is why he has such extensive contacts for goods. But the two companies are completely different businesses and have no connection, Edge told The Centurion. Still, if nothing else, Bluefly taught Colton that even the 1% like to get a deal. Colton’s markup on luxury brands is lower than usual, says Edge, even as much as 30% to 50% less. Like Costco, the membership fees underwrite the rest, though Edge prefers to compare it to a golf club that makes money on memberships rather than selling golf gear. And while $25,000 seems like a hefty fee, he says, it’s a family membership. So even if one person doesn’t individually spend that much on clothes in a year, throw in the family and it pays.
Colton’s has been open for six weeks, and according to Edge is doing “great,” even though it’s an off-season for fashion. And it’s not just because it’s bringing something new to Vancouver, though it does that.
“Clients love it! Even if we were in New York, Paris, or Milan, where all the brands are, we’d still be successful. People like to feel special. They like to feel exclusive and be pampered, with a company that has authenticity,” says Edge, whose background in advertising and marketing includes stints with both British Airways and Mercedes Benz.
The money comes as a result of making people feel special, says Edge. “The best advocates in the world are word-of-mouth advocates.